Minerals and Chemicals (Ga is a paper company and Pennwalt is a large diversified chemical producer) is less than the market beta (1.00).
From the table, we notice that the betas of 3 diversified chemical producers American Chemical, Kerr-McGee and Int. The detailed calculation is provided in the Appendix 1. To simplify the calculation, we assume that all these firms have tax rate at 48% and β debt is zero. The average beta is calculated from the formula: β asset = β equity /, where D is debt, E is equity and t is tax rate.
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